"Everyone must be nervous, yes, all of a sudden all the stocks fell."
A technical outage on the New York Stock Exchange (NYSE) caused several stocks to display incorrect prices yesterday including Berkshire Hathaway which showed a 99% drop before normal trading resumed late Monday morning.
The issue stemmed from Limit Up-Limit Down (LULD) bands designed to control volatility, where about 50 stocks were affected causing Berkshire Hathaway's US Class shares to plummet from $620,000 to $185.10.
Not only that, other firms such as GameStop, AMC Entertainment and Chipotle are also facing the same issue but it should be noted that prices are back to normal soon after the technical problem is resolved.
Further disclosed by the NYSE, the LULD bands on its website have stopped trading above certain limit prices that are set and reviewed at regular intervals during the day.
There is no denying that some stocks recorded drastic changes, but the general market did not seem to be affected by the technical disruption, commented Art Hogan who is the Chief Market Strategist at B. Riley Financial.
Although representatives of the NYSE and the Securities and Exchange Commission have yet to provide more specific information about the cause of the problem, the NYSE's parent firm Intercontinental Exchange insisted that there were no signs of a cyber attack.
He added that the affected trades would be investigated but Themis Trading co-founder Joe Saluzzi raised doubts about the NYSE's initial explanation on the grounds that the transactions in question were abnormal and did not meet standard practices.
